A move-up often starts with the same practical question: "Can we afford this?" Start with a realistic estimate of what your current home will net after the mortgage payoff and selling costs. Let's do the math on an illustrative move-up : a Burleson-to-Southlake trade.
This is an illustration, not a quote. Selling costs are an assumed budgeting input, not a standard commission rate; commissions are negotiable. Your numbers depend on your home, your loan, and the market the week you sell. The structure of the math is the same for everyone.
Step 1: What you net from the starter home
Take a starter home worth $400,000 with a mortgage balance of $250,000.
| Line | Amount |
|---|---|
| Sale price | $400,000 |
| Less selling costs (commissions, title, concessions : assume roughly 7%) | ~$28,000 |
| Less mortgage payoff | $250,000 |
| Net proceeds to you | ~$122,000 |
Step 2: What that buys you as a down payment
Conventional wisdom says put 20% down. On a $1,000,000 home that's $200,000. On a $900,000 home, $180,000. So our illustrative family with $122,000 net proceeds is a bit short of 20% at $1M : and the honest math on the alternatives:
At $850,000, 15% down is $127,500 : $5,500 more than the $122,000 they have. At $900,000, it's $135,000 : $13,000 short. And that's before buyer closing costs, prepaid items, and the reserves a lender will want to see in the bank after closing. So the honest options: - Target a purchase the equity actually funds. At $800,000, 15% down is $120,000 : the proceeds cover it, but they leave only $2,000 for closing costs and nothing for reserves. Even at the bottom of the band, the equity funds the down payment, not the whole purchase. - Bring savings to the table. Many move-up buyers pair sale proceeds with existing savings for closing costs and reserves : the down payment from the house, the cushion from the bank. - Discuss a lower down payment with a lender. Private mortgage insurance and reserve requirements at bigger loan sizes are lender conversations : sometimes a smaller down payment with strong reserves is the better structure, sometimes not. Ask. The biggest lever on the proceeds side is what your current home actually nets : which starts with pricing it correctly, not hopefully.
Step 3: The payment reality check
The down payment is not the number that decides whether you can afford the move. The monthly payment is. Two illustrative payments at an illustrative 6.5% 30-year fixed rate (rates move : your lender's quote is the only one that counts):
- $850,000 loan: ~$5,373/month principal and interest
- $720,000 loan (20% down on $900K): ~$4,551/month principal and interest
Before property taxes : which in Southlake will be calculated on the home's taxable value under the rules in the property tax post : and before insurance on a seven-figure home.
A useful discipline: ask your lender to model the full payment : principal, interest, taxes, insurance : at your real price, and then live on that payment for two months before you list your house. If the number works, everything else is logistics.
Step 4: The hidden asset
Here's the part first-time sellers undervalue: the equity isn't just the down payment. It's also the qualification. A family with a solid income that sells a $400K home with $122K net proceeds can often qualify for a payment that felt impossible while carrying the old house. The sale is the enabler.
Common questions
How much equity do I need to put 20% down on a $1M home?
About $200,000 for the down payment, plus closing costs and reserves. But 20% isn't a rule : a lower down payment with strong reserves can be the smarter structure. That's a lender conversation.
Should I use all my equity as a down payment?
Not automatically. Reserves matter at jumbo loan sizes, and so does having cash for the move, the gap between closings, and first-year surprises in a bigger house.
How do I know what my home is really worth?
Not from an online estimate. Text me the address: 817-372-9896.
